<p>Scalable Architecture Maximises Business Continuity for Data Centres, Branch Offices and Individual Desktops/Notebooks</p><p>Sydney, Australia – June 14, 2005-FalconStor Software, Inc. (Nasdaq: FALC), a leading developer of network storage software solutions, today announced the next generation of its award-winning IPStor® Enterprise Edition software solution, offering the industry’s first scalable Continuous Data Replication (CDR) services to maximise business continuity of mission-critical messaging/database applications in the data centre, and business-critical applications in branch offices, individual desktops or notebooks.</p><p>IPStor CDR unifies and delivers the advanced features provided by both asynchronous mirroring and periodic delta replication in a single software package. IPStor CDR offers continuous journaling of a production system's write-command in the background, with minimal impact to primary storage, enabling Administrators to easily achieve established Recovery Point Objectives (RPO).</p><p>IPStor CDR also integrates and collaborates with client-side FalconStor Snapshot Agents, which are available for all major databases, file systems, and message stores. IPStor Snapshot Agents enable TimeMark® snapshots to be taken against any active database in real-time, with 100% data integrity to facilitate rapid recovery (file, email or database) or high-speed backup via the IPStor HyperTracTM Backup software solution, with zero-impact to the host, allowing Administrators to meet established Recovery Time Objectives (RTO).</p><p>“Today's corporate IT storage environments are facing more challenges regarding data recovery, and are attempting to remedy issues faced in their prior recovery process,” said Michael Karp, senior analyst, Enterprise Management Associates. “FalconStor's unique continuous data replication service cost effectively addresses the issue of mass application/database failure by allowing recovery to the last change in data, enabling businesses to quickly recover and resume business operations immediately.”</p><p>The CDR services in IPStor enable IT managers to:</p><p>• Maximise network performance via sophisticated I/O, CPU and network throttling to achieve efficiency and reliability. CDR can automatically adapt to the environment based on the performance and availability of the network link between the primary and disaster recovery sites. If CDR detects a network failure, it will switch/throttle into a delta replication mode, and will automatically resume continuous operation when the link is recovered, without human intervention.</p><p>• Establish near-line storage in the data centre for rapid recovery; off-load processing including backup, data mining operations, and application testing, and to act as a hot-standby server for the primary disk array.</p><p>• Replicate information from branch offices to a corporate data centre for centralised backup and compliance.</p><p>• Deploy user-initiated backup and instant recovery for desktops and notebooks to guard against virus and spyware infection. CDR provides recovery of user data as well as full system recovery via a Recovery CD, Fibre Channel (FC) or iSCSI HBA, or PXE protocol.</p><p>IPStor CDR can be deployed as a network storage appliance (running Windows, Linux or Solaris) to intercept traffic between the application host and storage array, or to intercept an application host’s I/O through a Cisco FC switch via the Cisco SANTap interface, or as host-resident software (DiskSafe) to capture and redirect the data ‘write’ to a network storage appliance powered by IPStor.</p><p>“Based on our years of experience with strategic and solution partners, as well as large enterprise customers, FalconStor recognises that data stores are critical to business operations,” said John Lallier, FalconStor vice president of technology. “The new features in IPStor provide data protection across the enterprise, including remote offices and individual desktop/notebook, from system-wide and site level outages for rapid recovery of crucial applications, files and object/message stores.”</p><p>About FalconStor</p><p>FalconStor Software, Inc. (Nasdaq: FALC) is a leading developer of network storage software designed to optimise the storage, protection and availability of enterprise data. FalconStor's flagship product, IPStor, enables corporate IT to deploy a hardware-agnostic, network-centric foundation to maximise operating efficiency and business continuity, and to meet the availability requirements of mission-critical applications. IPStor-powered network storage solutions are available and supported by major OEMs, as well as system integrators and resellers worldwide.</p><p>Founded in 2000, FalconStor is headquartered in Melville, NY, with offices throughout Europe and the Asia Pacific regions including Paris, Tokyo and Taiwan. FalconStor is an active member of the Technical Support Alliance Network (TSANet), Storage Networking Industry Association (SNIA) and Fibre Channel Industry Association (FCIA). For more information, visit www.falconstor.com.</p><p>This press release includes forward-looking statements that involve risk and uncertainties that could cause actual results to differ materially from the forward-looking statements. These risks and uncertainties include: delays in product development; market acceptance of FalconStor's products and services; technological change in the storage and networking industries; competition in the network storage software market; the potential failure of FalconStor's OEM partners to introduce or to market products incorporating FalconStor's products; intellectual property issues; and other risk factors discussed in FalconStor's reports on Forms 10-K, 10-Q and other reports filed with the Securities and Exchange Commission.</p><p>###</p><p>FalconStor, IPStor, TimeMark and HyperTrac are trademarks or registered trademarks of FalconStor Software, Inc. All other company and product names contained herein may be trademarks of the respective holders.</p><p>Media Contacts:</p><p>Rob StirlingMarkom Marketing+61 2 9977 8922rob_stirling@markom.com.au</p><p>Joel NortonFalconStor Software+61 2 8912 2153joel.norton@falconstor.com</p>

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